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Frequently Asked Questions
What is a Land Development Agreement?
A Land Development Agreement (LDA) is a tailored contract that offers a turnkey development solution for broadacre landowners to transform their landholdings into a new housing estate. Both the interests of the developer and landowner are aligned for maximum returns and the landowner remains on title until the project is completed.
How does a Land Development Agreement differ to a straight-out sale?
The LDA model allows the landowner to maximise the returns from their land over the duration of the development. They get to share in the development profits along the journey, which is always more than just a straight-out sale at a fixed price. Main reason the returns are far superior is that the end lot prices increase over the course of the development, the landowner gets to share in that uplift.
What are the benefits of a Land Development Agreement?
Maximum Profit – The landowner shares in development profits along the development journey. These returns always outstrip what you could get under a straight sale.
Regular Payments – Once the LDA is signed we pay for all project costs including your rates, taxes, and any other holding costs. In most cases there is an upfront payment to the landowner as well.
Minimised Risk – As the landowner you retain ownership of the land until final settlement of each lot within the project.
Trusted Partner – We are an experienced developer, and we deliver what we promise with over 11 years of delivering successful residential projects.
Financial Security – We guarantee a minimum return through a set floor pricing strategy.
Flexibility – Every LDA is tailored to suit your needs and you can take any portion of proceeds in subdivided lots and retain your house.
How does Resi Ventures choose landowners to partner with?
Resi Ventures undertakes comprehensive research into all growth corridors and highlights potential development sites that meet our criteria. We conduct an in-depth due diligence report covering all opportunities and constraints relating to the site such as planning, servicing, and market drivers. Put simply we want to do good projects with good people.
Are all Land Development Agreements structured the same?
No, all LDA’s are structured differently to meet the needs of the landowner. However, a typical LDA works as follows:
• Resi Ventures advances money for your land that you can use straight away. We can also make regular advances until the development profits flow from the settlement of lots in the first stage of the project.
• The parent title of the land remains in your name until the development is complete.
• Resi Ventures will pay the ongoing holding costs such as Council Rates and Land Tax.
• Resi Ventures will add value to your land whilst funding all project related costs including planning permits and civil works costs.
• Resi Ventures will project manage and fund the whole development process and share the development profits with you.
How is the development of the project funded?
The development phase of the project is 100% funded by Resi Ventures.
Do I receive regular updates on the project?
Yes, you receive a quarterly report from the Development Manager working on the project.
How long from when the I sign the contract until the project commences?
Every property is different, depending on the current state of the zoning of your land, for example if your property does not yet have a PSP approved it will take longer than land that is zoned residential and has a permit, termed ‘shovel-ready.’ Project development commences immediately after issue of a Permit, with strategic market planning and the appointment of a sales team. The onsite civil works start as soon as we have tendered and appointed a contractor and achieved the relevant approvals to commence.
How does the payment structure work?
Payments occur throughout the project as outline in the landowner returns projection that is created for each individual project.
What is the timeframe from signing the contract to project completion?
This will vary depending on the size of the project. A project containing up to 500 lots in which the land is currently going through a rezoning process will generally take between 6-7 years from signed agreement to the completion of the housing estate and settlement of titles.
What size broadacre land is suitable for a Land Development Agreement?
Land that is 12ha (30 acres) and above, there is no maximum.
What happens if the business defaults?
In an unlikely situation where a default arises using the LDA your position is secure as Resi Ventures have no rights to the land. We forfeit everything we have spent on the development which you get the benefit of.
What is the risk under a Land Development Agreement?
There is minimal risk to the landowner as you retain ownership of land until final settlement of each of the lots within the project.
Call Rodney Mifsud, Director – Acquisitions on 0438 598 011 with any further questions.